Apple at its launch event in Cupertino, announced a game changing innovation, the new kind of credit card named Apple Card.
The Apple Card is a new form of Mastercard. It is built into the Apple Wallet app on iPhone, offering customers familiar experience with Apple Pay and the ability to manage their card right on iPhone.
According to Apple CEO Tim Cook, the new credit card would be “the most significant change in the credit card experience in 50 years.”
However, Lisa Ellis, partner at MoffettNathanson and head of its payments, processors and IT services business comments is quite reasonable.
She said, finance “Is a very full and saturated market,”. However, “the question is, what would make people go and get a new card?”
Hence, Apple claims the card will resolve many consumer frustrations. And it boasts some intriguing benefits, like no fees and a daily rewards program. It will be simple to sign up for, there won’t be any fees, and it will be easy to redeem rewards.
The company also firmly asserts that Apple Card “transforms the entire credit card experience by providing a new level of privacy and security.”
iPhone users can sign up for Apple Card in the Wallet app on their iPhone in minutes. Thereby, start using it with Apple Pay right away in apple stores, in apps store or online worldwide.
A unique card number is created on iPhone for Apple Card and stored safely in the device’s Secure Element. Apple uses a special security chip used by Apple Pay. Every purchase is secure because it is authorized with Face ID or Touch ID. It also have a one-time unique dynamic security code.
Apple Card Design
The card is a shiny, laser-etched titanium card with Apple logo which feel like the ultimate status symbol. This Card is really optimized for mobile payments. This means you can use it anywhere that takes Apple Pay, and there are some pretty big incentives to do so.
The Advantages of Apple Card
According to Apple, the Apple Card offers a clearer and more compelling rewards program than other credit cards with Daily Cash. It gives back a percentage of every purchase as cash on customers’ Apple Cash card each day.
Hence, purchases made via Apple Pay either in apps store or at business points earn 2% percent back in “Daily Cash” rewards. Meanwhile, the old-fashioned credit card swipes only earn you 1 percent. Finally, every Apple Pay purchases directly from Apple earn the most at 3% percent back.
The Daily Cash reward are paid at the end of the day on Apple cash card unlike most conventional cards.
Apple Card’s goal is to provide interest rates that are among the lowest in the industry. There are no fees associated with this Card. No late fees, annual fees, foreign transaction fees, or higher interest fees for late payments.
Financial Tracking and Report
This Card is designed to help customers lead a healthier financial life. This starts with a better understanding of their spending so they can make smarter choices with their money. Apple promise transparency by using machine learning to track your spending and suggest ways to manage your debt.
Apple Card uses machine learning and Apple Maps to clearly label transactions with merchant names and locations. Purchases are automatically totaled and organized by color-coded categories such as Food and Drinks, Shopping and Entertainment. To help customers better understand their spending, this card provides weekly and monthly spending summaries.
This card gives customers easy-to-understand, real-time views of their latest transactions and balance right in Wallet. However, Apple Card support is available 24/7 by simply sending a text from Messages.
On security, Apple does offer benefits, though the underlying technology isn’t new. Apple already relies on two-factor authentication for Apple Pay. This factor now allows users to put other credit cards in their digital wallet.
Apple says the card offers more privacy than others, because Apple isn’t tracking the transactions. Likewise, Goldman Sachs has agreed not to sell or share user data for marketing or ads.
For security reasons, the Apple card comes with no card number, CVV security code, expiration date or signature on the card. Hence, the Card is more secure than any other physical credit card. Any needed information is easily accessible in Wallet to use in apps and on websites.
Completing a transaction through Apple Pay requires a unique identifier and a one-time-use security code. Likewise, additional biometric verification is required via FaceID or TouchID. This way, real credit card number is never even transmitted for any transaction. Hence, there is no way for fraudsters.
Although, Apple would prefer that you do online transactions with Apple Pay. However, if you don’t there aren’t any additional special attributes of Apple’s card protecting you.
The Card does not allow users to add a family member or anyone as an authorized user. This is quite a drawback, as the card does not recognize shared accounts with a spouse. However, it is necessary for strong security reasons.
Apple is partnering with Goldman Sachs and Mastercard to provide the support of an issuing bank and global payments network. As a newcomer to consumer financial services, Goldman Sachs is creating a different credit card experience centered around the customer. Its policy includes never sharing or selling data to third parties for marketing and advertising. Mastercard however, will provide cardholders the ability to shop at merchants around the globe.
“Simplicity, transparency and privacy are at the core of our consumer product development philosophy,” said David M. Solomon, chairman and CEO of Goldman Sachs. “We’re thrilled to partner with Apple on Apple Card, which helps customers take control of their financial lives.”
“We are excited to be the global payments network for Card, providing customers with fast and secure transactions around the world,” said Ajay Banga, president and CEO of Mastercard.
Overall, Apple’s efforts to increase Apple Pay usage are commendable from a security and anti-fraud standpoint. And it’s clear that the purpose of Card is to drive adoption and use of Apple Pay. But the Apple Card itself is a little more run of the mill.